KARACHI: Commenting on the slowdown in foreign investment, Dr. Ishrat Husain said that FDI could only be attracted in a scenario with transparent and predictable trade policies, a free and stable exchange rate, and open trade between India and Pakistan. Trade with India would allow Pakistan access to the large Indian market. Only 14% of the population is currently banked, adding that the growth of the Pakistani microfinance industry would help a great deal in this regard.
He was talking in an audience organized by ACCA Pakistan, (the Association of Chartered Certified Accountants) is the global body for professional accountants, organised a networking session in Karachi.
Dr. Ishrat Husain said that privatising certain public sector organisations could help Pakistan become economically self sufficient. He cited the example of the banking sector in 2002, when the GOP held 80% shares, non-performing loans stood at 25%. Today, with the private sector controls 80%, non-performing loans stand at around 3%.
Dr. Husain also said that the growth of microfinance would not only provide small business owners and entrepreneurs with access to much-needed capital, it would help introduce financial services to the currently untapped market, while simultaneously helping boost the economy by encouraging and assisting small entrepreneurs.
Dr. Ishrat Husain also spoke about the importance of building a base of trained and qualified financial professionals. He said that this was especially relevant within the investment sector, so as to ensure that only the very best investment advice was given out to the public. He asked the audience to help create an incentivised environment, with attractive employment opportunities, in order to help attract financial experts and avoid a brain drain to other countries. Dr. Husain is credited with helping restructure Pakistan’s State Bank and revolutionising the banking sector. He is also an advisor member of the Economic Management Team for the Government of Pakistan and played a key role in the impressive economic turnaround
The session, hosted by Arif Mirza, Head of Policy MENASA ACCA, focused on ‘positioning Pakistan in the global economy, opportunities and challenges’, and covered topics including global and national economic policy, trade liberalisation policies, and the potential for Foreign Direct Investment in Pakistan. Arif Mirza, who is associated with the management board of FINCA Microfinance Bank Ltd, the Institute of Capital Market (ICM,) and technical advisor on the IFAC PAODC, opened the session by sharing some background information about current economic challenges and issues.